Why You Read Free Advice
The Breaking News headline at CNBC:
They have painted themselves into a corner, folks. They only time they will seriously consider reducing the monetary base, is when milk and gasoline prices are rising at significant monthly rates.
At the conference in Manhattan, a very intelligent woman (who I think reads this blog–I’m not making fun of you, honest!) asked the panel if the Fed would have the ability to avert deflation, what with the deleveraging process.
In my wise-alecky response, I pointed out that Bernanke had the technical ability to create a quadrillion dollars on Wednesday if he wanted to. He doesn’t need the commercial banks to advance loans. Bernanke has now gotten everyone used to the idea that he can unilaterally write checks on the Fed, and buy any financial asset he wants, so long as he can give a sound bite about why this will help.
Krugman Lets the Cat Out of the Bag?
Remember in 1984 that there was one Party enthusiast who was so dogmatic and zealous for Big Brother that they had to take him out? I wonder if that’s Paul Krugman. He is almost charmingly transparent in his advocacy of bigger government.
For example, check out this blog post on financial regulation, with the revealing title, “Thank You, Lloyd Blankfein”:
FinReg: what do I think? I think Ed Andrews has it right: not all it should have been, but better than seemed likely not long ago, thanks to a changed climate. Wall Street in general, and Goldman in particular, provided scandals at just the right time. Thank you, Lloyd Blankfein.
Hmm, are you thinking what I’m thinking? Six months ago, Goldman Sachs was the quintessentially connected insider firm, with incredibly close ties to the Obama administration and in fact the entire world financial and regulatory structure.
And then, the incredibly klutzy head of Goldman Sachs decides to urinate it all away, in a series of absurdly ill-considered moves. The Obama administration suddenly becomes distant from the firm which three weeks earlier had presumably owned the administration. Oh, and a good thing too, because Goldman’s uncharacteristically boneheaded moves give the Obama administration a perfect excuse to grab more power.
I realize that a good conspiracy theory is non-falsifiable: If Goldman is on top, it’s evidence that the game is rigged. And then if Goldman is apparently on the outs, it’s also evidence that the game is rigged.
But I want to see Goldman actually go down in flames, and the Obama administration use its new powers to promote a Goldman rival, before I believe the firm was actually thrown under the bus.
Strategies for Evangelism
Someone at the Des Moines Campaign for Liberty event gave me Mark Cahill’s One Thing You Can’t Do In Heaven. The one thing, is that you can’t share the good news of Jesus’ atonement for our sins with nonbelievers in heaven.
The book is filled with stories and strategies of how Cahill goes around witnessing to people. Apparently he is quite successful at it, because even many atheists end their conversations by saying, “Thanks for the way you handled that,” meaning he doesn’t jam the J-word down people’s throats.
For example, Cahill knows that when he flies somewhere, he is going to witness to the person next to him. He has many different, non-threatening lead-in questions. E.g. he’ll strike up a generic conversation, and then once he has built a rapport, he’ll ask, “Can I ask you an interesting question?” Of course the person says yes, then he might say, “When we die, what do you think happens? Where do we go?”
And then whatever the person says, Cahill will treat it respectfully, but if the answer isn’t, “We face the God of the Bible and I sure hope I have given my life to Christ at that point,” Cahill has a variety of arguments to defend his own answer to that question.
It’s a very interesting book, and one thing that I’ve struggled with myself. On the one hand, I remember when I was an atheist, that it made me extremely uncomfortable if people would point-blank ask me, “Do you know Jesus?” or things like that. I personally did not come around to Jesus through that direct assault.
On the other hand, if I actually believe that people who don’t understand things the way I do, are going to miss out on eternal paradise, well gee whiz I should be devoting a lot more time to helping them grab the life preserver. It doesn’t mean I have to be obnoxious, but it certainly means I should be doing more for their welfare.
I’m wondering if any of you guys and gals have done cold calls for Christ, as it were. I remember once a guy approached me in the parking lot of a grocery store and said, “Sir, do you know Jesus?” and I said, “Yes I do!” It made my day, to see him being so earnest in his beliefs.
I also remember one time I was cutting the lawn in Hillsdale, and two Mormons approached me. I can’t remember exactly the back-and-forth, but even when I told them I was a born-again Christian, they were still trying to get me to realize I was missing certain things.
I said, “Look guys, I appreciate what you’re doing, but I have to get back to the lawn.” They were fine with that and went their way. Of course I don’t believe the things they do, but I have to respect people who go door to door, inviting ridicule from just about everyone else for their religious convictions.
Busy Busy Busy
Hey folks, I apologize for those of you who emailed me about buying my surplus PIG books. I have back-to-back trips, and in between I’m trying to get the manuscript for the IBC book done so it can be ready for the July extravaganza.
Soooo, I am planning on getting all the books out in the mail next week, when I’m back from Manhattan and have a lull in my travel schedule. If you have a Politically Incorrect Guide emergency and need me to mail it sooner, shoot me an email and I’ll try to accommodate.
(Also, I still have extras of both books [I think] so if you still want one or both, let me know.)
Ironic Quote of the Month
On CNBC’s main page:
“I’m convinced the markets are really out of control,” German Finance Minister Wolfgang Schaeuble told the FT. “That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism.”
Tell me about it! The German government bans naked short-selling, and then the idiotic markets start tanking all over the place. Reminds me of the time the US government tried to rein in drug use, and then those chaotic gangsters started killing everybody. MAN freedom is so overrated.
Goldbug Wind Tunnel
OK kids, I am working on something for the layperson, and I want to give some suggestions for reform. I have given the caveats that political “fixes” are always messy, and that all we know for sure is that returning money and banking to the private sector is the ultimate goal and solution.
Having said all that, of course I can’t help myself and make a proposal. Let me know what you guys think would happen in the financial markets in the following scenario:
In order to give a concrete example of how such a policy could work, suppose that Bernanke called a press conference and announced the following (keeping in mind that the officially reported U.S. gold reserves in December 2009 was a little over 8,000 tons) :
“Effective immediately, the Federal Reserve will begin a program of gold accumulation, purchasing 100 tons per month, until total official reserves equal 15,000 tons. Every quarter we will allow outside auditors to inspect our vaults and verify our holdings. Furthermore, in exactly twelve months we will begin selling gold at a price of $2,000 per ounce to any party, whether foreign central bank or private individual. This offer will remain a permanent feature of Federal Reserve policy, and the gold redemption price will remain fixed.”
CPI Up 2.2% Over Last Year
The CPI numbers are out. According to our trusty government officials, prices rose 2.2% from April 2009 to April 2010. Of particular interest is that the “energy” component of the CPI is up 18.5% for that 12-month period.
Now I know some of you are mad for two reasons:
(1) I keep making forecasts instead of sticking to a priori analysis, and
(2) I keep citing bogus government numbers, when the true price inflation rate is much higher.
In response, all I can say is that it would be a bloodless economic theory if it never gave you the confidence to say, “Holy cow, we are moving in a terrible direction here, and the government is setting us up for disaster.”
Also, I am using the government’s numbers because I don’t want to look like I’m just arguing with definitions. If and when the price inflation comes that I have been expecting, we’re not going to need to decompose seasonal adjustments, hedonic indices, and the like; it’s going to be obvious. The reason I use the government’s own figures is that they don’t support the official narrative. Look, from April 2003 to April 2004, CPI rose about 2.3%. We didn’t fall into a deflationary black hole then, and the monetary base didn’t look like this at the time.
My Week in Haiti
At Mises.org today I have a long article describing some of my “economic” lessons from Haiti:
In my brief time in Haiti, I saw the laws of economics at work. Entrepreneurs rushed to satisfy customers, as proven by the owners of motorcycles who suddenly became taxi drivers after the roads were filled with rubble. Government, in contrast, completely failed to deliver promised services to the people. I was pleasantly surprised to see that the “nongovernmental organizations,” at least the one I worked for, were filled with some of the most interesting people I have ever met.
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